8th Pay Commission: From Policy Review, Cabinet Approval To Implementation –Key Stages Explained

New Delhi: As Lakhs of central government employees are expecting a salary hike under the 8th Pay Commission, they must be clear regarding confusion over hikes. The employees must understand that the formation of the Pay Commission and its methodology for deciding salary hikes.

These Pay Panel and its decision outcomes are a highly systematic and structured process that follows a defined sequence of steps and takes into account various economic and social factors. 

8th CPC Key Stages: From Policy Review, Cabinet Approval To Implementation

The 8th Pay Commission was announced by the Narendra Modi-led government on January 16, 2025. The Union Cabinet on October 28 approved the Terms of Reference (ToR) for the Pay Commission which will review salaries, allowances and pension benefits for central government employees and pensioners. The tenure of the 7th Pay Commission ended on December 31, after which it is time for the 8th Pay Commission.

The 8th Pay Commission must go through a multi-layered process that includes financial assessment, comprehensive stakeholder consultations, policy review and cabinet approval before it can be implemented and benefits distributed to beneficiaries.

How will salary hike be decided?

The 8th Pay Commission salary increase will be determined based on the fitment factor proposed by the CPC members. The fitment factor is the multiplier that the new CPC employs to determine the new basic pay. The 7th Pay Commission’s fitment factor is 2.57.

Why will salaries not increase immediately?

Many employees are expecting to start receiving new salaries and pensions from January 2026. However, it is important to note that although the government has approved the ToR for the 8th Pay Commission but its recommendations are yet to be submitted or implemented. A Pay Commission is considered operational only after the commission submits its recommendations, the government formally accepts them and an official notification is published in the Gazette. In the case of the 8th Pay Commission, these stages have not been completed so far. 

When will salaries increase?

The Commission is still working and a decision on implementation is pending. Revised pay will start only after the Union Cabinet approves the recommendations. The government employees and pensioners will have to wait for the pay commission to raise their salaries since it takes time to properly implement a big commission like the pay commission.

While the 8th Pay Commission has been formally constituted, its recommendations are still in progress. Going by past trends, once the report is submitted, the government usually takes another 3 to 6 months to examine, approve and notify the recommendations. This makes late 2027 or early 2028 a more realistic timeline for implementation.